LNG in the spotlight

Wall Street forecasters are keeping a close eye on LNG stocks this week in the wake of reports that Russia will no longer allow its cash-strapped neighbour to purchase natural gas on credit.

Shares of GasLog Ltd jumped 1.86% to end the day at $27.06.

On Monday Gazprom said it was
switching Ukraine to what a statement described as a “prepayment system” on the
heels of a billion-dollar dispute over lapsed bills.

The state-controlled energy giant pledged
to “make the greatest possible efforts” to prevent the disruption of supplies
to other customers but admitted there may be “shortfalls in transit”.

Since Ukraine, Germany and other
consumers of Russian gas boast what some experts have called “ample reserves”
few believe the cuts will have an significant impact on the European gas trade
in the near-term but admit the future remains uncertain.

A leading equity analyst tells
TradeWinds that this uncertainty is fuelling renewed interest in shares of
publicly-traded operators of LNG carriers that would be in a position to cash
in on increased demand for gas from other sources in the event of a prolonged
disruption.

Today, all but one of the LNG stocks
tracked by the TradeWinds Shipping Index gained traction in early trading but
started to lose momentum in the hours leading up to the close. The list
includes GasLog Ltd, Golar LNG Ltd and Teekay LNG Partners, among others.

Gazprom has expressed concerns that
Naftogaz Ukraine, the primary target of the $4.5bn legal dispute, will “siphon
off” gas that flows through the nation to other countries, which may not come
as a surprise since roughly 15% of Europe’s supplies pass through Ukraine.

The crisis in Crimea could herald a victory for international shipping as political pressure in the US to open up new gas markets becomes the keystone in Eastern European countries’ bid to establish alternatives to Russian pipeline gas

Political tensions in Ukraine may end up accelerating the approval of applications for licences to export LNG from the US to countries that lack free trade agreements with the nation’s government, a top equity analyst told clients Thursday.

Copyright

To protect your subscription investment, we've instituted a security system to protect against the electronic redistribution of copyrighted Tradewinds content. If you know how to turn off JavaScript in your browser though, this is largely ineffective.
Read more